No windfall tax on Shell's monster profit

THE government will not impose a windfall tax on the huge profits made by oil giants. Speaking after Shell made a UK record annual profit of é9.3bn, Treasury minister John Healy told Parliament he had no plans to impose any tax.

THE government will not impose a windfall tax on the huge profits made by oil giants.

Speaking after Shell made a UK record annual profit of é9.3bn, Treasury minister John Healy told Parliament he had no plans to impose any tax.

His statement came as calls increased over the oil company's gains, coming soon after US giant ExxonMobil, the owner of Esso, announced a é13.27bn profit.

The bumper results come as motorists face pump prices of more than 80p a litre.

Martin O'Neill, chair of the Commons Trade and Industry Select Committee, led the calls for a windfall tax. The Labour MP said Shell should be "encouraged" to invest more of the money in community and social responsibility projects.

Excessive

A windfall tax would be appropriate if profit derived from UK operations was excessive, Mr O'Neill said.

"Shell operates across the world and it would be wrong to tax them for activities outside the UK and I'm not sure we could make it stick," he said.

"But we need to very carefully look at the make-up of the profits to see if they have benefited from the rise in oil and gas prices in the UK - which affect the poorest households especially."

Graham Kerr, of energywatch, said: "British business and domestic consumers are handing over an extra é5bn in clear profits to gas and oil producers this year.

"Surely, it's only a matter of time before the reasons behind these vast profits are exposed and that producers are forced to make market information available that allows buyers to purchase fairly and not be left with a `take it or leave it' deal."

Obscene

Tony Woodley, general secretary of the Transport and General Workers Union, described the level of Shell's reported profits as "more than excessive".

He said: "Such levels of excess are, quite frankly, obscene. With our pensions in crisis, these profits are 9.3 billion extra reasons for a windfall tax."

But the Treasury minister Mr Healy said: "When profits and prices are high of course oil companies pay more tax. Next year we expect, in North Sea taxes alone, oil companies to contribute almost é6bn."